Reserve Bank of India, Bhopal invites sealed tenders in Part-I and Part-II for “Conducting Energy Audit of Bank’s Office Building, Reserve Bank of India at Bhopal”, the estimated cost of which is 1.00 Lakhs. The work is to be completed within a period of six weeks.
2. The tenderer should have experience of conducting energy audit in buildings, establishments, industries and should meet the eligibility criteria mentioned in the tender.
3. Tender forms are available from 07.04.2021 to 27.04.2021 or it can be downloaded from Bank’s Website www.rbi.org.in. Tender Forms will have to be submitted in a sealed cover at Reserve Bank of India, Hoshangabad Road, Bhopal up to May 07, 2021 by 14:00 Hrs along with earnest money deposit of Rs 2000/-.
The Reserve Bank of India has decided to keep rates unchanged and maintain its accommodative stance to support growth.
The decision was taken at the meeting of the first policy review for 2021-22 by the Monetary Policy Committee, which is chaired by RBI Governor Shaktikanta Das.
“The stance will remain accommodative till the prospects of sustained recovery are well secured while closely monitoring the outlook on inflation,” Das said on Wednesday.
The repo rate continues to stand at four per cent and the reverse repo rate at 3.35 per cent.
The move comes amidst the second surge of Covid-19 cases that has raised concerns about economic recovery and rising inflation.
Das further noted that prospects for 2021-22 have improved with the Covid-19 vaccination programme but adds uncertainty to the growth outlook. Economic activity is, however, normalising despite the surge in infections.
The world of money is about to leap into the great unknown of central bank digital currencies. Will it land in a utopia of universal financial inclusion or crash into a dystopia of instability? Perhaps the experiment will upend banking as we know it, or turn out to be one big damp squib, unable to compete even with an existing private network like PayPal Holdings Inc?
Any of these outcomes are possible. Technology is enabling monetary authorities to give ordinary people access to a kind of electronic cash they have never had before. Digital money won’t feel new: It will offer instantaneity, just like PayPal, Alipay or WeChat Pay do. Like now, the purchasing power will sit in a smartphone wallet tied to a regular bank account, allowing funds to be swept in and out. But unlike now, the balance in the wallet will be sovereign liability. Just like cash.
This difference will matter in case of bank runs. As you and a hundred others queue up to take all your savings out of a commercial institution that’s suddenly rumoured to be unsafe, you can buy a book online using your new electronic cash — that is, make a payment without debiting your bank account — and Amazon.com Inc’s bank won’t have to worry about getting remunerated.
A big relief? Let’s be reasonable. In a functioning 21st-century state, where there are no breadlines or snipers shooting from rooftops, no seller frets about small payments getting blocked because of bank failures. Deposit insurance takes care of that. Any advantage from possessing the mother of all money — one that extinguishes all claims of the merchant on you, yours on your bank, or the seller’s bank’s on your bank — is irrelevant. PayPal linked to a regular bank account works just fine in ordinary situations.
But supply can create its own demand. Already the competitive pressures are mounting: the People’s Bank of China is expected to roll out its electronic yuan, e-CNY, as early as next year. If it doesn’t, then the Chinese might start using Bitcoin as a store of wealth and a means of payment. If the US Federal Reserve doesn’t respond, Americans might take to e-CNY, a direct claim on the People’s Bank of China. A new survey by the Bank for International Settlements shows that central banks are worried about residents shunning money they alone can print. “Widespread adoption of a foreign retail CBDC,” as BIS General Manager, Agustin Carstens, said in a recent speech, can be understood “as ‘digital dollarisation,’ or insert the currency of your choice here.”
It’s the prisoner’s dilemma and the quandary of how and whether to cooperate. No central bank has to issue its own digital cash if no other state or private actor introduces tokens that act like money. That fork in the road is already behind us, thanks to cryptocurrencies going mainstream. So authorities in most countries may have no choice except to jump on the bandwagon.
The question then is, should they make their offering attractive? Cash doesn’t pay interest, but central bank digital currencies can. That’s because they’ll be tied to accounts held with monetary authorities. If they do pay interest, we may not want to keep money in a vanilla savings account. What happens next is anybody’s guess. Some researchers argue that this will be the harbinger of the central bank “as a deposit monopolist, attracting all deposits away from the commercial banking sector.” Others are more sceptical: “It is unlikely that central banks would be able to offer the same spectrum of services that are associated with a private bank account.”
Not always negative
There’s a third view: Unless central banks also start underwriting loans, banks may do just fine. Yes, lenders will have to pay more for deposits, and seek out bottom-of-the-pyramid customers they currently ignore. But greater financial inclusion will be a good thing. As long as the deposit rate is lower than the interest they receive on reserves parked with the monetary authority, and that in turn is lower than what they can charge on loans, banks can survive. Official digital currencies “need not have a negative impact on bank lending operations if the central bank follows an interest rate policy rule,” concludes David Andolfatto, an economist at the Federal Reserve Bank of St. Louis, adding that well-designed official electronic cash “is not likely to threaten financial stability.”
A fourth scenario
Consider a fourth scenario: digital currencies that are truly international, not confined to the technology choices of national payment systems. As Peter Bofinger and Thomas Haas of the University of Wuerzburg in Germany write: “The benchmark is set by PayPal which is the ‘elephant in the room’ of global payments.” Who’ll want a piece of this PayPal beater? Diem, as the former Facebook Inc-sponsored network is now called, could be a customer. Diem will issue private cryptocurrencies that are pegged to legal tenders and, therefore, less volatile than Bitcoin. Instead of keeping reserves with different monetary authorities to back its stablecoins, Diem can simply buy the required e-CNY, FedCoin, and the rest. Provided these different digital currencies are integrated on a single platform.
That’s not happening soon, not when central bank electronic cash is being viewed as a Cold War-type space race between superpowers. Monetary technocrats may not share their political masters’ chest-thumping nationalism, but they won’t be able to keep it at bay.
Axis Bank has become a co-promoter of Max Life Insurance after a regulatory go ahead from the Insurance Regulatory Development Authority of India (Irda).
The private sector lender will also nominate three representatives to the board of Max Life Insurance post this development. The three representative are Rajiv Anand, Rajesh Dahiya and Subrat Mohanty.
Anand heads the retail banking portfolio of Axis Bank while Dahiya heads multiple functions such as audit, human resources and compliance. Mohanty is the head of banking operations.
Further, two additional independent directors will join the board of Max Life Insurance, according to sources in the know.
“Axis Bank has been a long-term partner to Max Life and together we have contributed to deepening insurance penetration in India over the last decade,” said Amitabh Chaudhry, managing director and chief executive officer, Axis Bank.
Axis Bank had announced its intent to purchase a 30% stake in Max Life Insurance for a sum of around Rs 1,530 crore in April last year. The transaction underwent some tweaks to adhere to Reserve Bank of India and Irda recommendations.
As per the current structure, Axis Banks now owns a 13% stake in the life insurer with the option to increase its stake to 20%.
“The conclusion of this transaction will bring added strength to Max Life and help it chart a new growth trajectory by combining the forces of the third largest private bank in India and the fourth largest private life insurer in the country,” said Analjit Singh, chairman of Max Group and Max Financial Services.
Max Financial Services, a listed company, owns around 87% stake in Max Life Insurance. The remaining stake is held by Axis Bank.
Analjit Singh and his family own a 17.3% stake in Max Financial Services. Mitsui Sumitomo owns around 20% stake in Max Financial after it swapped its stake in the life insurance arm with a stake in the parent company in December.
Max Life Insurance’s growth has outpaced its private sector peers in the first nine months of 2020-21.
The company has reportedly grown its individual adjusted new sales at 14% during this period.
“Axis Bank’s role as a co-promoter de-risks the business because 60% of our sales are contributed by the bank. That is one of the major positive outcomes of this transaction,” said Prashant Tripathy, chief executive officer, Max Life Insurance.
The insurance sector has witnessed sporadic deal making in the past 12 months. IDBI Bank sold its stake in its joint venture with Belgian life insurer Ageas and Federal Bank in a recent development. Ageas acquired IDBI’s Bank’s stake to consolidate its holding. Axa has also put its stake in an insurance broking JV with Mahindra group on the block.
The second wave of Covid-19 is sweeping India, with more than 12 million cases reported. The country’s stock market, on the other hand, has shaken off its pandemic funk to reach new highs; the benchmark Sensex is up 75% from a year ago. The number of billionaires in India has increased to 140 from 102 last year, with their combined wealth nearly doubling to $596 billion. At the very top, prosperity reigns supreme: The three richest Indians have amassed a combined fortune of just over $100 billion. Mukesh Ambani has reclaimed his position as Asia’s richest person, with a net worth of $84.5 billion, after successfully diversifying his oil and gas empire into fast-growing sectors such as telecom and retail, according to Forbes.
The following are India’s ten wealthiest people, as of March 5, 2021:
Mukesh Ambani
NET WORTH: $84.5 BILLION
RESIDENCE: MUMBAI
Despite the Covid-19 pandemic, Ambani was able to raise $35 billion through a series of deals, allowing him to meet his goal of reducing Reliance Industries’ net debt to zero by 2021. Mukesh Ambani remains the wealthiest Indian for the 14th year in a row. He also owns the Mumbai Indians of the Indian Premier League and is the founder of the Indian Super League, a football league in India, through Reliance. Forbes named him one of the world’s wealthiest sports owners in 2012. [26th] He lives in the Antilia Building, which is one of the most expensive private residences in the world, with a price tag of $1 billion.
Gautam Adani
NET WORTH: $50.5 BILLION
RESIDENCE: AHMEDABAD
Last September, Adani purchased a 74% stake in Mumbai International Airport, the country’s second-busiest. He also sold a 20% stake in Adani Green Energy, a publicly traded renewable energy company, to Total, a French energy conglomerate, for $2.5 billion. As shares of his companies, including Adani Enterprises and Adani Green Energy, skyrocketed, infrastructure tycoon Gautam Adani became a staggering $42 billion richer. With a five-fold increase in wealth since 2020, Adani is now the second-richest Indian, surpassing retailing tycoon Radhakishan Damani, whose fortune was split this year.
Shiv Nadar
NET WORTH: $23.5 BILLION
RESIDENCE: DELHI
Last July, the tech titan handed over the chairmanship of HCL Technologies, a $9.9 billion (revenues) company, to his only daughter, Roshni Nadar Malhotra. Microcomp, a company that specialised in selling teledigital calculators in the Indian market, was Nadar and his partners’ first venture. HCL was founded in 1976 with an Rs. 187,000 investment.
Radhakishan Damani
NET WORTH: $16.5 BILLION
RESIDENCE: MUMBAI
Avenue Supermarts, the low-profile retailing king’s listed supermarket chain, operates 221 DMart stores across the country. Gopikishan, his brother, is also a billionaire. Previously, he held second place, whose fortune was divided this year. For the first time, his brother Gopikishan Damani is listed separately, based on new information about his holdings.
Uday Kotak
NET WORTH: $15.9 BILLION
RESIDENCE: MUMBAI
Kotak Mahindra Bank, one of India’s top four private banks, was founded and is run by India’s wealthiest banker. Kotak sold $950 million worth of shares in June to reduce his stake in the bank to 26%, as required by the Reserve Bank of India. Kotak founded Kotak Capital Management Finance Ltd after completing his MBA (which later became Kotak Mahindra Finance Ltd). He grew a bill-discounting start-up into a financial services conglomerate with assets of US$19 billion (as of March 2014) and the second-largest scheduled commercial bank by market capitalization in India (private and PSU) with over 1250 branches from a seed capital of less than US$80,000 borrowed from family and friends.
Lakshmi Mittal
NET WORTH: $14.9 BILLION
RESIDENCE: LONDON
Mittal stepped down as CEO of ArcelorMittal, the $53.3 billion steel behemoth, in February, handing over the reins to his son, Aditya. Mittal is still the company’s executive chairman. He is also the “57th most powerful person” in Forbes’ 2015 “Most Powerful People” list, which includes 72 people. The wedding of his daughter Vanisha Mittal was second-most expensive in history.
Kumar Birla
NET WORTH: $12.8 BILLION
RESIDENCE: MUMBAI
Birla, the fourth generation heir to a vast commodities empire, has paid a high price for his foray into telecom. In the fight against Ambani’s Jio, his Vodafone Idea rebranded as Vi, a joint venture between his Idea Cellular and the Vodafone Group in the United Kingdom, has been losing money. The European Commission approved his Novelis’ $2.6 billion acquisition of Aleris, an aluminium producer in Ohio, in October 2019.
Cyrus Poonawalla
NET WORTH: $12.7 BILLION
RESIDENCE: PUNE
Poonawalla’s Serum Institute of India, the world’s largest vaccine producer by doses produced, is at the forefront of India’s fight against Covid-19, with multiple vaccine partnerships orchestrated by his son Adar, Serum’s CEO. This year, Adar also paid $475 million for a 60% stake in Magma Fincorp, a publicly traded finance company.
Dilip Shanghvi
NET WORTH: $10.9 BILLION
RESIDENCE: MUMBAI
Shanghvi, the founder and CEO of Sun Pharmaceuticals, has re-entered the top ten thanks to a 68% increase in the company’s stock price. Dilip Shanghvi, the son of a pharmaceuticals distributor, borrowed $200 from his father to start Sun Pharma, a psychiatric drug company, in 1983. He grew Sun through a series of acquisitions, the most notable of which was the $4 billion purchase in 2014 of scandal-plagued rival Ranbaxy Laboratories.
Sunil Mittal & family
NET WORTH: $10.5 BILLION
RESIDENCE: DELHI
After Ambani’s Jio, his Bharti Airtel, a joint venture with Singapore’s Singtel, is India’s second-largest telecom operator. Mittal’s son Kavin announced on Twitter in January that his SoftBank-backed start-up Hike, once regarded as India’s answer to WhatsApp, had closed down its messaging service. Mittal bought a stake in the publicly traded AU Small Finance Bank through his personal investment firm in May 2020. Hike, the SoftBank-backed startup founded by Mittal’s son Kavin and regarded as a rising unicorn, has shut down its messaging service and is now focusing on gaming.
For investment related articles, business news and mutual fund advise
In July of last year, the government released a new rule under the Income Tax Act. If an individual withdraws money from small savings schemes such as public provident fund (PPF), post office deposits, recurring deposit, or national savings certificate, he or she is responsible to pay TDS (tax deducted at source) at the rate of 2-5 per cent if the individual has not submitted ITR in the previous three years, according to Section 194N of the Income Tax Act. TDS will be deducted u/s 194N at 2% if an individual withdraws more than Rs 20 lakh but does not surpass Rs 1 crore from all post office schemes, including PPF or 5 per cent if the amount exceeds Rs 1 crore if the individual has not submitted income tax returns (ITR) for the preceding three assessment years.
The rates and thresholds are determined by whether or not the individual withdrawn money has submitted an ITR in the three previous appraisal years for which the filing ITR deadline has ended. TDS is not deducted for cash withdrawals up to Rs 1 crore in a year if you have submitted an ITR for any of these three assessment years, and TDS is deducted at a rate of 2% for cash withdrawals above Rs 1 crore. TDS regulations apply to cash withdrawals from banks, co-operative banks, and post offices. But even if you submit Form 15H/G, a statement that your income is below the exempted cap, you won’t be able to avoid paying TDS. TDS is withheld at the depositor’s Post Office, and the account holder is informed in writing. The liable postmaster is entirely responsible for TDS deduction in accordance with the act since it is a legal obligation. TDS non-deduction can result in a penalty or a recovery, depending on the situation.
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At a time when public sector companies are giving huge dividends to the government, the Reserve bank of India may transfer a lower surplus to the government.
The Reserve Bank earned less on the record reserve pile up and also stares at lower interest income as banks parked surplus liquidity with it.
A nearly 25 percent jump in forex reserves has led to a fall in returns by nearly a fifth. Returns on reserves deployment were lower at $4.3 billion during April-December’20 compared with $5.2 billion in the same period a year ago, according to the latest data from the RBI. Interest hit
The amount of interest it paid to keep the system in surplus liquidity could also hurt its returns as it paid interest for keeping funds with it.
Banks are estimated to have parked over Rs 5 lakh crore on an average during FY’21 on which the central bank has to pay them 3.35 per cent interest.
While RBI’s balance sheet has expanded since June 2020, yields on foreign currency investments have indeed reduced over the past year.
For the Accounting Year 2019-20 (July-June).the RBI transferred only 44 per cent of its surplus at Rs 57,128 crore to the government, which is the lowest in percentage terms in the last seven years.
How does RBI earn?
The RBI is a “full service” central bank, which is not only is it mandated to keep inflation or prices in check, but also has to manage the borrowings of the central and state governments supervise or regulate banks and non-banking finance companies and manage the currency and payment systems.
It makes profits while carrying out these operations. The central bank’s income comes from the returns it earns on its foreign currency assets, which could be in the form of bonds and treasury bills of other central banks or top-rated securities, and deposits with other central banks.
RBI also earns interest on its holdings of local rupee-denominated government bonds or securities, and on lending to banks for very short tenures, such as overnight. It makes a management commission on handling the government borrowings.
ts expenditure is mainly on the printing of currency notes and on staff, besides the commission it gives to banks for undertaking transactions on behalf of the government across the country, underwriting government borrowings.
Surplus transfer
The RBI isn’t a commercial organisation like the banks or other companies that are owned or controlled by the government and it does not, as such, pay a “dividend” out of the profits it generates.
The central bank transfer the “surplus” – that is, the excess of income over expenditure – to the government, in accordance with Section 47 (Allocation of Surplus Profits) of the Reserve Bank of India Act, 1934.
Excessive transfer
In August 2019, RBI’s central board gave its nod for transferring to the government a sum of Rs 1,76,051 crore comprising Rs 1,23,414 crore of surplus for 2018-19 and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF).
The excess reserve transfer was in line with the recommendation of former RBI governor Bimal Jalan-led panel constituted to decide the size of capital reserves that the central bank should hold. The government was represented by the then Finance Secretary Rajiv Kumar in the panel which finalised its report on August 14, 2019 by consensus.
Since 2013-14, the RBI has been paying 99 per cent of its disposable income to the government, which is battling to rein in deficits.
The size of the Reserve Bank’s balance sheet, which is reflective of activities carried out by it in pursuance of currency issue function as well as monetary policy and reserve management objectives, has increased by 30.02 per cent in the year ended June 30, 2020,
The partial lockdowns imposed by few states due to Covid-19 may have some impact on the business, but Rajak claimed that nothing was visible on-ground yet. Representational Image
By Ankur Mishra
IIFL Finance expects loan assets under management (AUM) to grow by 15% in the financial year 2022 (FY22), CFO Rajesh Rajak told FE. The lender is finding comfort from loan growth due to improved collections in the recent months. Without specifying details, Rajak said collection efficiency had sustained the trend after good show till December 2020. The collection efficiency had improved to 98-100% in home loans, 85-90% in business loans, more than 100% in gold loans and the micro-finance segment till December 2020.
The partial lockdowns imposed by few states due to Covid-19 may have some impact on the business, but Rajak claimed that nothing was visible on-ground yet. “If there is an extreme situation, we will get affected like everyone else but the whole idea will be to get impacted lesser than the industry,” Rajak said.
Last week, rating agencies Crisil had revised its rating on company’s arm IIFL Home Finance to ‘stable’ from ‘negative’. “The current outlook back to ‘stable’ revision factors in the continuous improvement in collection efficiency (excluding foreclosures) resulting in the uptick in asset quality metrics being lower than previous expectations despite weak macroeconomic environment,” Crisil said. The outlook revision also factors in the improvement in fund raising of the company, the rating agency said. IIFL Finance had raised `670 crore from non-convertible debentures (NCDs) in March 2020. Earlier in March, another rating firm Fitch had affirmed IIFL Finance’s long-term issuer default rating (IDR) at ‘B+’ and removed it from rating watch negative (RWN). This reflects Fitch’s view of easing downside risk to the company’s credit profile due to less adverse economic and funding conditions, which we expect to be broadly sustained in the coming year, the rating firm said.
Analysts at Kotak Institutional Equities said the fourth quarter (Q4FY21) was a strong quarter for non-banking financial companies (NBFCs), with disbursements picking up sequentially across the board, driven by moratorium exit, pent-up and seasonally strong demand.
“While disbursements were strong, loan growth may be muted. Weak new business momentum in the first half of FY21 will likely drag loan growth for the next few quarters and bottom out sometime in FY22,” the Kotak Institutional Equities report said on Tuesday.
Reported slippages would be elevated, KIE said, but banks were not expected to report a worrying ratio, given the improvement seen in economic recovery in recent quarters.
As banks report their first set of quarterly earnings after the Supreme Court vacated an interim stay on the recognition of fresh bad loans, slippages could be elevated in Q4FY21, analysts said. Lenders could also reverse some amount of interest income, which could get reflected in their net interest income (NII) numbers. Kotak Institutional Equities (KIE) expects NII growth to be 18% year on year (YoY) for banks. “On the net interest income line, we see a higher level of one-off income recognition (due to NPL recovery) and income de-recognition (slippages recognised in this quarter on a cumulative basis for lenders who have not done it previously),” the brokerage said, adding that treasury income would be lower, too.
Reported slippages would be elevated, KIE said, but banks were not expected to report a worrying ratio, given the improvement seen in economic recovery in recent quarters. “We expect overall NPL (non-performing loan) ratios to remain significantly lower than RBI projections, considering that we have seen significant recovery of bad loans from a few companies (steel and infrastructure),” KIE said. Reported write-offs could be high as well.
Loan losses in the banking sector, as measured by the gross non-performing asset (GNPA) ratio could nearly double to 13.5% by September in a baseline scenario, and to as high as 14.8% in a severe-stress scenario resulting from the pandemic, the RBI had said in its last financial stability report (FSR). Volatile trends could emerge on provisions as lenders are likely to dip into Covid provisions made earlier or make higher provisions this quarter as well.
Analysts at Motilal Oswal Financial Services said while overall trends in asset quality had fared better than expectations, the recent surge in Covid-19 cases and the fear of a lockdown in key districts necessitate being watchful on asset quality. “While many banks have already provided for this likely increase and carry additional provision buffers, which should limit the impact on profitability, we expect them to continue to strengthen their balance sheets and credit cost to remain elevated,” they said in a report.
While analysts have mixed views on the pace of loan growth, most of them expect it to be driven by retail credit. Corporate credit growth remains muted in a scenario of overall deleveraging and lower risk appetite on the part of lenders.
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